Answers to your insurance questions

What happens if your are in an accident with fraudulent insurance? If your pink card is a fake then are you without coverage?

The Financial Services Commission of Ontario (FSCO), insurance regulator for that province says that you might still have coverage.

The insurance answer is the definition of the word “nexus.” Nexus is defined in the Oxford dictionary as a "connection" or "bond". In this situation the nexus is a police report.

Four years ago there was a smaller two-car accident in the York Regionw hich is just north of Toronto, Ontario. The vehicle containing Georgiy Gnidenko and Vladimir Danilov collided with another vehicle at an intersection. Danilov was driving.

Both men suffered soft-tissue injuries. Danilov submitted a claim for statutory accident benefits to Unifund Assurance Co. Unifund is a Newfoundland-based division of The Johnson Corp., a Canadian holding company controlled by the Royal & SunAlliance Insurance Group of Britain.

Unfortunately Unifund had no record of this insurance policy. The pink card declaring the insurance had been fraudulenty issued by an office in North Toronto. Unifund did not want to respond to the claim for several thousand dollars.

The case went to aribtration and the FSCO arbitrator Robert Bujold ruled that Unifund should pay as Danilov was not aware of the fraud. A similar situation can arise when a person who has been in a car acident discovers that the vehicle's policy is not valid because it as cancelled or has expired.

When that situation occurs then the procedure under Ontario's no-fault regulations is to have the insurer pay the money. Then subrogation occurs. This is when the insurer tries to get the money back from the insurer of the second vehicle. This is part of the insurance answer to have injury claims dealt with as quickly as possible.

In this particular situation Unifund did not make its subrogation claim within the 90 day requirement because they felt that they would not need to pay out at all. Part of the requirements is that there must be a sufficient connection show between the car and the company apparently insuring that particular vehice.

All of these considerations had to be weighed. The case is being appealed by Unifund.
Unifund feels it is a victim of the fraud and should not be held responsible. At this point the insurance answer is the needs of the victim need to be considered first.